ABSTRACT
A company faced by a sudden crisis which threatens its survival in the short term normally has few options to choose from. Crisis which threatens the enterprise as a whole may leave top management with no choices at all. By its nature crisis leads to stakeholders trying to use their influence to ensure outcomes beneficial to their interests and this may limit choice. When responding to crisis decision makers have to make general plans for recovery. Porter (1980) identified three generic strategies which provide a useful starting point for thinking about recovery strategies. We then go on to look at the main choices that face managers in crisis situations and the possible broad strategies that they might adopt. This leads to the question of analysing how the enterprise utilises its resources. Financial problems are frequently mentioned as indicators of crisis. Internal financial weakness compared to competitor positions is discussed using the value chain and cost advantage approach.
